UPDATE 1-Cuba says latest offshore well is not successful

HAVANA, Aug 6 (Reuters) - Cuba's hopes for energyindependence suffered another blow on Monday when its state oilcompany said the island's latest offshore oil well was notsuccessful.

Cubapetroleo said the well drilled by Malaysia's state-ownedPetronas in partnership with Russia's Gazprom Neft found oil butin a geological formation so tightly compacted that oil and gascould not flow through it in "significant quantities."

"It cannot be qualified as a commercial discovery," thecompany said in an announcement in the Communist Party newspaperGranma.

It was the third failed well in three attempts in Cuba'spart of the Gulf of Mexico, where the communist country has saidit may have 20 billion barrels of oil.

The government led by President Raul Castro needs the oil tofree it from dependence on socialist ally Venezuela, which underan oil-for-services deal sends Cuba about 115,000 barrels of oildaily.

With Venezuelan President Hugo Chavez battling cancer andfacing re-election in October, the future of his oil largess forCuba is uncertain.

Cuba produces about 50,000 barrels a day from onshore wells,but it consumes an estimated 147,000 barrels daily and refinesmost of the rest for sale to other Caribbean countries.

Spanish oil company Repsol hit a dry hole in Cubanwaters in May and said it would likely pull out of the countryafter 12 years of operations, two unsuccessful wells andexpenditures of $125 million.

Its first well, drilled in 2004, found oil but, like thePetronas well, was deemed not commercially viable.

Repsol's recent well, drilled north of Havana in partnershipwith Norway's Statoil and ONGC Videsh, a unit ofIndia's ONGC, found no hydrocarbons at all.

Cubapetroleo said the Petronas well, completed on July 31,was drilled west of the Cuban capital in 7,408 feet (2,258meters) of water, much deeper than Cuban and Petronas officialspreviously had suggested.

EXTENDED OIL ZONE

It said the oil that was found "could extend to other zones"in the four offshore blocks leased by the two companies andperhaps beyond.

Petronas and Gazprom would continue to study datacollected during the drilling and conduct more seismic studies,Cubapetroleo said.

Despite the three failed wells, Cuba oil expert Jorge Pinonat the University of Texas in Austin said it is likely Cuba doeshave offshore oil, but that finding and producing it will takeyears.

"The bottom line is that Cuba is not going to get anyeconomic benefit from an oil find any time soon. This is along-term exercise - it's going to take a long time to getresults," he said.

One problem facing Cuba is that its potential fields aremostly in what the oil industry calls "ultra-deep water," whichrequires specialized drilling rigs not readily available to theisland because of technology limitations imposed by thelongstanding U.S. trade embargo.

Repsol spent years finding and waiting for the newly-builtScarabeo 9 rig as it was constructed in China. It is owned byItalian oil service company Saipem.

The rig will now go to Venezuela's PDVSA to drill a well atCuba's western tip, Cubapetroleo said, but after that its futureis not clear.

The Scarabeo 9 is contracted to stay in Cuba only until July2013 and could leave earlier if no other company wants it.

Once it is gone, it will take a while to find anotherdeepwater rig to continue the exploration of Cuban fields.

"Whatever the scenario on this (Petronas) well and PDVSA'sis totally irrelevant in the short-term since the Scarabeo 9will be gone," Pinon said.

Several other companies hold exploration blocks in Cubanwaters, but none are known to have firm drilling plans.Petrovietnam has said it would wait to see the results of thesefirst wells before deciding what to do in its three explorationblocks.

ONGC Videsh has said it is seeking partners to share thehigh cost of drilling its two blocks.

Cuba's offshore drilling has stirred environmental concernsin Florida, where fears that a repeat of the 2010 BP blowout inthe U.S. Gulf of Mexico could damage the state's beaches andcoral reefs.

The BP well spewed nearly 5 million barrels of oil into thegulf and onto hundreds of miles of beaches in Florida and otherstates. Cuban officials say they have taken all precautions toguard against a similar accident.